The former British colony’s reputation as an international financial center has been battered during the last two years by its adherence to China’s unbending Covid restrictions. They have made the city less attractive for expats and much harder for foreign executives to visit.

Speaking in Mandarin at his inauguration, attended by Chinese President Xi Jinping, the chief executive of the Hong Kong government said he would “consolidate” the city’s “inherent advantageous industries.”

Lee didn’t give any policy detail, nor did he address growing pushback against the city’s controversial Covid policies and border controls that have alarmed many international companies.

Earlier this year, a survey of European businesses in Hong Kong found that nearly half of them were considering relocating in the next year.

That tracked with a similar report from the American Chamber of Commerce in January, which found that 44% of expats and businesses were likely to leave the city.

“Hong Kong still holds business opportunities but an array of issues, especially draconian travel restrictions and worsening US-China relations, weigh on sentiment,” the US report said.

Hong Kong’s quarantine rules are notorious among residents and expats. At one point, the government required most inbound travelers to isolate in hotel rooms, on their own dime, for three weeks, one of the world’s longest isolation periods.

Although Hong Kong officials have lifted flight bans and scaled back the quarantine requirements, an outflow of talent is already playing out.

Even without the Covid crisis, headhunters were having trouble bringing talent to Hong Kong because of Beijing’s growing oversight of the semi-autonomous territory.

Xi, in his speech at Lee’s inauguration ceremony on Friday, said Beijing would “fully support Hong Kong” in “consolidating its status as an international financial, shipping and trade center” and “maintaining a free, open and regulated business environment.”

Apart from enhancing Hong Kong’s current position in finance and shipping, Lee said his government would also build up the city’s technology and innovation industries.

“We will develop emerging industries, and build Hong Kong into an international innovation center,” Lee said.

During his speech, Lee extolled China’s Belt and Road and Greater Bay Area initiatives, which he said have given Hong Kong “unlimited opportunities and unlimited development space.”

Alex Stambaugh, Charlie Fong, and Allison Morrow contributed to this report.

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